Most companies don’t have a formal process for retiring unprofitable or outdated products.

The result is that they end up with ever-growing product lines that become more and more confusing. And worse yet, keeping all of the older versions of the products requires maintenance and overhead that saps the company’s resources which could be better spent on newer and more profitable products.

As the product ages it may be revised, with a new version as a replacement, or it might be intentionally discontinued or sold on an ongoing basis without much effort being put into it. Either way, at some point the product will be retired. For some products this isn’t much of an issue – the inventory can be sold off or the product can be removed from a website or price list.

For other products, such as Enterprise software or products being sold in the financial, government or medical fields, end of life can be a critical factor that must be planned for and dealt with effectively. And even in the consumer space this can be critical. Consider what would happen to Apple if they did the wrong thing with retiring a product when coming out with a new version. They might end up with billions of dollars of useless inventory and losses as well as a loss of reputation and customer loyalty.

Retirement and end-of-life for products is one area where companies can easily trim their overall costs by 5-10% and increase profitability.

The key is to do it in a planned and well-executed manner that is a routine part of the business.